Page 21 - Reinsurance Management IC85

The Insurance Times

and the forms of arrangements as placed directly or
through brokers.

Legal issues and tax matters are significant to
reinsurance accounting. Mind-blowing perils like
natural perils such as devastating floods, chilling
windstorms and life shattering earthquakes became
insurable because of sharing of risk through
reinsurance.

A long-standing relationship with the reinsurer can be
maintained only if proper accounts are rendered by
the ceding company. The actual must be reconciled
with past trends for renewal of the reinsurance
business.

It is not profit or earnings that can count in these risks
since one loss in 25 to 30 years can wipe out the entire
profits accumulated over a period of time. It is
reinsurance that is so special to motivate insurers to
venture into these kinds of businesses.

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